CPF Pension Plan Basics
The Episcopal Church Lay Employees’ Defined Contribution Retirement Plan
About This Course
Are you looking for ways to increase your contributions, choose the investment options that best suit your needs, or enhance your retirement savings? This course is designed to help you better understand the Lay DC Plan.
Select from topics such as:
- Ways to find money for savings
- What you may need to know about investing
- The advantages of your employer’s matching contribution
- How compounding interest and pre-tax contributions may work for you
Whether you are just getting started or are close to retirement, there’s information here that may make a difference in your future.
Approximately 20 minutes
- Kathleen Floyd, Senior Vice President Education and Wellness
- Pattie Christensen, ChFC, RICP, Vice President-Education
- Janet Todd, Ph.D., Manager of Curricula
Lay Employee Pension System
In 2009, the 76th General Convention of the Episcopal Church passed Resolution A138 and its associated Canon, establishing the Church-wide Lay Employee Pension System (LPS) and naming The Church Pension Fund (CPF) as administrator. Under this resolution, Episcopal employers subject to the authority of the Church are required to provide a pension to all lay employees scheduled to work a minimum of 1,000 hours annually.
There are two types of lay pension plans sponsored by CPF – the Episcopal Church Lay Employees’ Defined Contribution Retirement Plan (Lay DC Plan) and The Episcopal Church Lay Employees' Retirement Plan (Lay DB Plan).
- Employers determine which plan they wish to adopt.
The Lay DC Plan is a defined contribution plan. It is administered by Fidelity Investments.
- As a lay employee, you may participate in and contribute your own money to the plan regardless of whether you meet the eligibility requirements of General Convention Resolution 2009-A138.
If you meet the eligibility requirements of General Convention Resolution 2009-A138, however, your employer is required to make a contribution to an account in your name based on a percentage of your compensation. In addition, your employer may match your contributions up to a pre-determined maximum.
- - Generally, employers contribute 5% of your compensation and will also match your contribution up to 4% of your compensation.
- You can make a contribution to your account on a pre-tax basis or after-tax basis. Pre-tax contributions reduce your current income for federal income tax purposes.
- Your contribution and earnings grow tax-deferred, and you pay taxes when you begin to withdraw from the account.
- When you retire, the value of your savings depends on how much was contributed to the account and investment performance.
For details on the plan, enrollment, and investment options, see Defined Contribution Plan.
The Lay DB Plan is a defined benefit plan and is administered by CPF.
- You may participate in the plan only if you meet the eligibility requirements of General Convention Resolution 2009-A138.
Your employer contributes to the plan, but you may not.
- - Your employer contributes 9% of your eligible compensation.
- CPF manages the overall investment portfolio for the plan.
- At retirement, your benefit is based on a formula that includes how long you worked and how much you earned. It is not tied to investment performance.
- You must be vested in order to receive a retirement benefit.
- As a participant in the plan, you and your surviving beneficiaries may be eligible for additional benefits.
Participants in the Lay DB Plan who wish to save additional funds for retirement can contribute to the Retirement Savings Plan (RSVP), a 403(b) defined contribution plan.
For more information about the Lay DB Plan, including survivor’s benefits, see Defined Benefit Plan.
Tips & Resources - CPF Pension Plan Basics
If your employer participates in the Lay DC Plan, check to see if they match your contributions and how much the match is. If you can, contribute at least as much as your employer is matching; you don’t want to “leave money on the table.”
The Lay Defined Benefit Plan is a qualified plan under Section 401(a) of the Internal Revenue Code, but as a church plan, it is not subject to ERISA. The plan's financial condition is disclosed in the Church Pension Group Annual Report.
The Church Pension Fund, as sponsor of this plan, continues to monitor the funding status closely. Like many defined benefit plans, the Lay Defined Benefit Plan currently is not fully funded. The Church Pension Fund retains the right to amend, terminate or modify the terms of the Lay Defined Benefit Plan, including the employer assessment rate, without notice and for any reason.